The approval of Bitcoin ETFs has been debated for several days. There may be volatility in the market at the time of its approval. The move toward the SEC's decision on Bitcoin ETF approval should suggest investors are bracing for volatility as stablecoin flows to exchanges increase. People take a temporary break from trading, especially when the market sees volatility in the prices of various digital currencies or when the price of Bitcoin becomes unstable. This is because the chance of loss is high during this time and that is why many people buy stablecoins to maintain their net balance. Although many others prefer to bet this time quite well.
And during this time, bullish action started in the crypto market due to the expectation of spot bitcoin. And the data shows an increase in stable coin flow during periods of bullish action. Exchange-traded funds (ETF) approved in the US. However, many believe that traders are preparing to enter the market around this time. Stablecoin holdings in crypto exchange wallets rose from $18.05 billion in early January to $19.99 billion on January 7. But an important point is that the total trading volume of all stablecoins is now worth about $70 billion. But interestingly, more than two-thirds of this volume is Tether. Its amount is considered to be around $55.86 billion. People are investing in stablecoins especially around this time. Most of which are USDT. Stablecoins are starting to pile in as this year's highs begin to rise and their volume continues to grow.
Currently many participants are positioning the market centered on Bitcoin ETFs. The increase in stablecoin market cap and stablecoin inflows and outflows on the exchange has historically been a good indicator of gaining a general sense of how participants are positioning the market. While many are concerned about the first spot bitcoin ETF being approved by the SEC, many see new possibilities. So it can be said that instability may appear in the market around this time. The start of Bitcoin's rally in October 2020 was driven by an increase in the flow of stablecoins to exchanges.
Needless to say, large stable coin flows are often regarded as a short-term catalyst for Bitcoin's price action. Such factors indicate that foreign capital is moving back into BTC. As such, rising stablecoin allocations to crypto exchanges could be a sign that traders are bracing for market volatility in the January 10 window for the SEC to issue a final decision on bitcoin ETFs.